The Nursing Shortage Explained

I’m a markets guy. Supply and demand. Level-field competition. Aggressive antitrust enforcement. Strong consumer protections. Follow the money. Economic incentives drive behavior. Etcetera.

Because of that belief system, I’m instantly skeptical of any woe-is-us rhetoric from whatever healthcare industry sector is crying that day. There usually is a fact-based market story behind the story.

To wit, rural hospitals close because they don’t have any customers. (Read “The Simple Reason Why Rural Hospitals Close.”) Most physicians aren’t burned out. (Read “Did You Hear? The Majority of Doctors Aren’t Burned Out.”)

Lately, I’ve been hearing a lot about the nursing shortage and what’s causing it. It’s artificial intelligence. It’s understaffing. It’s burnout. It’s lack of a career path. It’s the workload.

In April, Nurse.org, the online platform for nurses, released the results of its 2026 State of Nursing Survey. The report is based on a survey of about 2,100  active nurses and nursing students. Here are some of the more pessimistic findings:

• 47% said they are satisfied with their current job.
• 43% said it’s likely that they will leave their bedside position within the next year.
• 42% said they work on units where the staffing levels have gotten worse in the past year.
• 24% said it’s likely that they will leave the nursing profession altogether within the next year.

I don’t doubt the sincerity of those responses. The responses are manifestations of the nursing shortage. But what’s behind the shortage?

It’s not a mystery. It’s simple market dynamics. The pace of nurses leaving the profession is faster than the pace of nurses joining the profession.

Let’s look at the first part of that equation. The No. 1 reason registered nurses (RNs) say they will leave the profession in the next five years is (drumroll please) retirement. Yes, retirement. That’s according to the 2024 National Nursing Workforce Survey published last year in the Journal of Nursing Regulation. The National Council of State Boards of Nursing and the National Forum of State Nursing Workforce Centers conducted the survey, and the results are based on responses from more than 182,000 RNs. Some 61.4% cited retirement as their reason for leaving nursing. Stress and burnout were a distant second at 41.3% followed by workload (32.8%) and understaffing (26.0%).

Let’s look at the second part of that equation. According to data released by the American Association of Colleges of Nursing (AACN) earlier this year, the fall 2025 enrollment in U.S. nursing schools for an entry-level baccalaureate nursing degree was 283,303. The number of students who graduated with an entry-level baccalaureate nursing degree during the 2024-2025 school year was 92,055.

But here’s the kicker. That same year, U.S. nursing schools rejected 75,255 applications from qualified candidates. That’s nearly as many as would graduate that year.

“The primary barriers to accepting all qualified students at nursing schools are insufficient clinical placement sites, faculty, preceptors and classroom space, as well as budget cuts,” the AACN said.

It’s not that fewer people want to become nurses because somehow nursing has become a less desirable profession. The opposite is true. More people want to become nurses. They just can’t get into nursing school. When you crosstab that against thousands of nurses retiring each year simply because they aged out, you get a nursing shortage.

It’s simple market economics of supply and demand. The market just happens to be dysfunctional.

Want more nurses? Fix the market.